Nifty ends below crucial 5,800 level amid selling in risk sensitive stocks

CNX Nifty extended losses to end over 1.5% down on Tuesday amid selling in rate sensitive stocks as investors turned cautious ahead of key economic data - April industrial output and consumer price index-based inflation data while the further fall in rupee continued to weigh on investor sentiment. Moreover, weak global cues also added to the pessimistic sentiments. Asian markets closed in red owing to China growth worries and continued uncertainty over the US. Meanwhile, European markets made a negative opening on Tuesday.

Back home, Indian equity benchmark made a negative start pressurized by weak cues from Asian peers. In the first half, market traded in negative territory as the weakness in rupee continue to hurt sentiments as it plunged to an all-time low of over 58.50 against the dollar on persistent dollar demand from importers and banks. Traders also remained sidelines ahead of April industrial output and consumer price index-based inflation data on June 12, which will help to determine the Reserve Bank of India’s (RBI) stance on the June 17 monetary policy review. Further, the RBI imposing monetary penalty on Axis Bank, HDFC Bank and ICICI Bank for violating its guidelines also dented the investor sentiments. Market extended its losses and continued weak trade till the end on account of selling in front line blue chip counters and taking cues from European counterparts. Moreover, Society of Indian Automobile Manufacturers’ (SIAM) report that overall passenger vehicles sales declined by 8.56 percent in April- May period on y-o-y basis also turned down the sentiments. Selling was witnessed in all major indices of the market. Finally, Nifty ended the session near its intra-day low level with a massive loss of 89 points.

Meanwhile, sectoral indices on the NSE made a negative closing. CNX Metal down 4.43%, CNX Realty down 3.80%, CNX Finance down 2.31%, CNX PSE down 2.21% and CNX Media down 2.02% remained the top losers in the trade. While, India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, up by 7.62% and reached 19.49.

The India VIX witnessed an addition of 7.62% at 19.49 as compared to its previous close of at 18.11 on Monday. The 50-share CNX Nifty lost 89.20 points or 1.52% to settle at 5,788.80.

Nifty June 2013 futures closed at 5801.65 on Tuesday at a premium of 12.85 points over spot closing of 5788.80, while Nifty July 2013 futures ended at 5821.15, at a premium of 32.35 points over spot closing. Nifty June futures saw an addition of 1.39 million (mn) units taking the total outstanding open interest (OI) to 13.56 mn units. The near month June 2013 derivatives contract will expire on June 27, 2013.

From the most active contracts, Reliance Communications June 2013 futures were trading at a premium of 0.05 points at 103.80 compared with spot closing of 103.75. The number of contracts traded was 24,002.

Tata Motors June 2013 futures were at a premium of 1.65 points at 294.75 compared with spot closing of 293.10. The number of contracts traded was 13,852. 

DLF June 2013 futures were at a discount of 0.20 points at 187.50 compared with spot closing of 187.70. The number of contracts traded was 13,996. 

Reliance Industries June 2013 futures were trading at a premium of 3.50 points at 789.50 compared with spot closing of 786.00. The number of contracts traded was 14,147.

Jindal Steel & Power June 2013 futures were trading at a premium of 1.35 points at 227.85 compared with spot closing of 226.50. The number of contracts traded was 42,569.

Among Nifty calls, 6,100 SP from the June month expiry was the most active call with an addition of 0.08 million open interest.

Among Nifty puts, 5,700 SP from the June month expiry was the most active put with an addition of 1.15 million open interest.

The maximum OI outstanding for Calls was at 6,100 SP (6.92 mn) and that for Puts was at 5,700 SP (6.46 mn).

The respective Support and Resistance levels are: Resistance 5844.45 -- Pivot Point 5812.4 -- Support 5756.75.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.96 for June -month contract.

The top five scrips with highest PCR on OI were DR Reddy 1.48, CESC 1.33, ACC 1.09, Apollo Tyre 1.01 and HUL 0.95.

Among most active underlying, Unitech witnessed an addition of 1.12 million of Open Interest in the June month futures contract followed by JP Associates which witnessed an addition of 0.22 million of Open Interest in the near month contract. Meanwhile, Reliance Communications witnessed an addition of 4.72 million in the June month futures. Also, R Power witnessed contraction of 0.83 million in Open Interest in the June month contract. Finally, Hindalco Industries witnessed an addition of 1.59 million of Open Interest in the near month futures contract.